Deferred annuities have two phases: the savings phase and the income phase. During the savings phase, investors deposit money into their account. When the income phase begins, payments are made to the investor at regular intervals.
Money earned by a deferred annuity is taxed when it is withdrawn, making it an attractive to those who want to keep their tax liability to a minimum. This kind of investment also pays a death benefit, guaranteeing that a beneficiary will receive the total value of the account. Many people have questions about deferred annuities that should be answered before they invest.
What is a variable deferred annuity?
When the investor gets to choose the investments associated with an annuity, it is variable. This means the value of the annuity may fluctuate with the market. This is the type of annuity that is most oriented toward growth, but it also has a higher risk associated with it. Flexibility attracts many to this type of account.
What is a fixed deferred annuity?
A fixed deferred annuity comes with a guaranteed minimum rate of return for a defined period. At the end of that period, a renewal rate is offered, giving the investor the opportunity to continue with the account if the rate is acceptable or bailout if it is too low. This type of deferred annuity is relatively conservative, making them attractive to investors nearing retirement. Their lack of liquidity, however, makes them ill-suited for investors who are nearing the end of their retirement.
If you are interested in joining our mailing list, please submit your email below. 
